India’s fiscal deficit for the first 10 months of this fiscal year through January stood at 11.03 lakh crore rupees, or 63.6% of revised annual estimates, government data showed today.
The fiscal deficit narrowed from 67.8% reported in the comparable year-earlier period.
“While there may be some slippage in the disinvestment target and capex may trail the FY2024 RE, ICRA does not expect the revised fiscal deficit target of Rs. 17.3 trillion for FY2024 to be breached,” said Aditi Nayar, Chief Economist at ICRA.
Total receipts stood at 22.52 lakh crore rupees, while overall expenditure in April to January was at 33.55 lakh crore rupees. They were 81.7% and 74.7% of this fiscal year’s revised budget target.
Total receipts in year-earlier period was at 81.3% of estimate, while expenditure narrowed from 75.7% a year earlier.
The remaining scope for revenue spending in the final two months of FY2024 is 6% higher from the Rs. 8.6 trillion expenditure during the same period last year, Nayar said, adding the government’s gross tax revenues require a modest 6% growth in the concluding two months of FY2024 to meet the revised estimate for the year, a target that appears readily attainable.
Revenue receipts stood at 22.18 lakh crore rupees, of which tax revenue was 18.80 lakh crore rupees and non-tax revenue was 3.39 lakh crore rupees.
Tax and non-tax revenues were 80.9% and 90% of the revised budgeted estimate. While tax revenue was same as the budget estimate in the last fiscal year, non-tax revenue rose from 88.2% of budget forecast in the same period last year.
Non-tax revenue jumped as the Reserve Bank of India approved the transfer of Rs 87,416 crore as surplus to the central government.
Revenue deficit was at 4.16 lakh crore rupees or 49% of the fiscal year’s revised budget target, data showed. The revenue gap sharply narrowed from 61% of the budget estimate in year-earlier period.
While announcing the federal budget for the next fiscal year starting April 1, Finance Minister Nirmala Sitharaman revised the fiscal gap aim down to 5.8% from 5.9% of gross domestic product forecast earlier, indicating the budget gap would shrink from 6.4% in the last financial year. Sitharaman also pegged the fiscal deficit target at 5.1% for the next fiscal year.
The lower fiscal deficit target for 2024-25 was expected on hopes of strong tax collections and expenditure rationalisation, while a relatively lower spending on subsidies is likely to create space for the lower fiscal deficit target.
Analysts said the government had prioritised pragmatism over prudence with ambitions to narrow the fiscal deficit even as it raised capex target for the next financial year to a record high and while the world’s largest democracy moves closer to general elections.
On the expenditure side, New Delhi spent about 3.16 lakh crore rupees on major subsidies such as food, fertilisers and petroleum. This was 76% of the revised annual aim, tad narrower than 77% of budgeted expenditure in the comparable period last year.
